Why Zoetis Inc. (ZTS), FireEye Inc. (FEYE) and Micron Technology, Inc. (MU) Are 3 of Today’s Worst Stocks

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When push came to shove towards the end of the week, with no solution to the Greek debt problem in hand, traders simply decided to scale back on their trading activity until they have more clarity. The S&P 500 closed at 2,101.60 on Friday, down a mere 0.03%.

Why Zoetis Inc. (ZTS), FireEye Inc. (FEYE) and Micron Technology, Inc. (MU) Are 3 of Today's Worst StocksFor Zoetis Inc. (NYSE:ZTS), Micron Technology, Inc. (NASDAQ:MU) and FireEye Inc. (NASDAQ:FEYE) shareholders though, it was a remarkably bad day. Here’s why.

Micron Technology (MU)

Friday was nothing less than horrible for shareholders of Micron Technology. Last quarter’s numbers were disappointing, and an even-more alarming outlook for the company sent MU shares down a stunning 18%.

Operating net income of 54 cents per share missed analyst estimates of 56 cents per share of MU, and came up well short of the 68 cents per share the company earned in the same quarter a year earlier. Sales of $3.85 billion were a bit lower than the prior year’s Q3 top line and also missed estimates of $3.9 billion.

The bulk of the damage done to MU shares on Friday, however, stemmed from the lackluster outlook for the current quarter. Micron Technology now anticipates revenue of between $3.45 billion and $3.7 billion for Q4, versus analyst estimates of $4.16 billion. The weak numbers widely point to a fading PC market.

Zoetis (ZTS)

Just one day after the stock surged 11% on rumors of a buyout, Zoetis fell 12% on Friday after analysts chimed in on the matter.

The rumored acquisition offer was supposed to come from Valeant Pharmaceuticals (NYSE:VRX), and is presumably being spurred by activist investor Bill Ackman … who just so happens to own a sizable stake in ZTS shares.

Friday’s pullback was largely started by questions regarding the potential upside of ZTS now that rumors of the pending offer have leaked. Up 49% since the end of last October as of Thursday’s close, analysts are concerned Zoetis shares were already trading as high as any plausible offer could take them. As William Blair analyst John Kreger explained about Thursday’s jump, “[ZTS stock] garners a multiple of 29.6 times our 2016 earnings estimate and 18.7 times our 2016 EBITDA estimate.”

FireEye (FEYE)

Last but not least, analysts have been tough on FireEye in the latter half this week.

The beatdown began modestly on Wednesday when Citigroup suggested FEYE wasn’t well-positioned for higher values in a slow-growing standalone Advanced Persistent Threat (or APT) market. The FireEye fireworks really started to fly on Friday, however, after Barclay’s downgraded FEYE from an “overweight” to an “equal weight” rating while simultaneously starting coverage of FireEye rival Fortinet (NASDAQ:FTNT) with an overweight rating.

Barclays analyst Saket Kalia noted:

“…as cash flow improves we think valuation will shift to EV/FC — we look toward FY19 as management gave an illustrative model for that year. Even with 25% revenue growth, 30% cash flow margins, and a 30x multiple, we arrive at a $56 PT, which currently warrants an EW rating, in our view.”

Factoring in today’s 5% stumble from FEYE, the stock was off 9% for the week.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/06/zoetis-inc-zts-fireeye-inc-feye-micron-technology-inc-mu-3-todays-worst-stocks/.

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